A specific provision in California’s Homeowner Bill of Rights may have led to a surge in foreclosure cancellations, according to a report fromForeclosure Radar.

Foreclosure cancellations in California spiked 62.1 percent from September to October and 36.7 percent over a one-year period, data from Foreclosure Radar revealed.

The jump from September to October is the largest monthly increase since the data provider began tracking foreclosures in September 2006.

Foreclosure Radar observed the increase may be due to a particular provision in the Homeowner Bill of Rights that places a ban on dual-tracking. Dual-tracking occurs when a loan is being pushed through the foreclosure process while also being considered for a mortgage modification or short sale.

Even though the Homeowner Bill of Rights doesn’t take effect until the start of next year, ForeclosureRadar says it appears lenders have begun the process of canceling foreclosures that are being considered for short sales or modifications.

“The California Homeowner Bill of Rights that takes effect in January 2013 is beginning to impact foreclosure trends,” said Sean O’Toole, founder and CEO of Foreclosure Radar. “This is another example of where changes in foreclosure trends are driven by government intervention, and not necessarily economic recovery.”

The impact of dual-tracking is still uncertain, but O’Toole speculated, “the elimination of dual tracking may avoid some unnecessary foreclosures, but will lengthen the foreclosure process and delay ultimate recovery. Expect further impacts to foreclosure trends in the months ahead.”

In addition, the $25 billion mortgage settlement placed a ban on dual tracking, which took effect October 3, but the restrictions were for the five largest servicers involved—Bank of America, Citi, JP Morgan Chase, Wells Fargo, and Ally.

“Much of the California Homeowner Bill of Rights codifies for California what was in the National Mortgage Settlement, but it applies to all lenders,” Susan Sierota, chief marketing officer at ForeclosureRadar, added.

Fewer California properties also entered the foreclosure process last month. In October, foreclosure starts fell 8 percent month-over-month. Foreclosure sales increased monthly by 9.3 percent, but fell 38.9 percent from last year.

Two other states in the West saw monthly declines in foreclosure starts during the same time period. In Arizona and Washington, October foreclosure starts fell 15 percent and 4.1 percent, respectively.

Two other West coast states, Nevada and Oregon, saw foreclosure starts increase 32.2 percent and 58.5 percent, respectively.

Foreclosure sales in Nevada came close to matching starts, increasing 33.8 percent, while foreclosure sales in Oregon fell 55.3 percent.

In September, all five Western states saw monthly declines in foreclosures starts.

 Should Florida have the same law?  If so contact you state representative.